The Financial Times Reports on President Trump’s LNG Export Push
FINANCIAL TIMES REPORTS ON PRESIDENT DONALD J. TRUMP’S EFFORTS TO EXPAND LIQUEFIED NATURAL GAS EXPORTS
“Donald Trump is engineering a sharp shift in US energy policy by using natural gas exports as an instrument of trade policy, championing sales to China and other parts of Asia in an effort to create jobs and reduce US trade deficits. In an attempt to unleash US energy resources, Mr. Trump is trying to promote more liquefied natural gas exports and not just use LNG as a geopolitical weapon aimed at nations such as Russia, as was the stance of his predecessor Barack Obama.”
Trump looks to lift LNG exports in US trade shift
By Barney Jopson, Demetri Sevastopulo and Ed Crooks
June 22, 2017
Donald Trump is engineering a sharp shift in US energy policy by using natural gas exports as an instrument of trade policy, championing sales to China and other parts of Asia in an effort to create jobs and reduce US trade deficits.
In an attempt to unleash US energy resources, Mr Trump is trying to promote more liquefied natural gas exports and not just use LNG as a geopolitical weapon aimed at nations such as Russia, as was the stance of his predecessor Barack Obama.
The goal of the push is to help US LNG companies land sales contracts in energy-hungry nations across Asia, including Japan and India.
When Mr Trump visits Warsaw in July before the G20, he is expected to tout the first Cheniere shipment of LNG to Poland which arrived recently. But the most obvious shift in the US stance came during negotiations with China in which the US provided an explicit guarantee that Beijing wanted in order to entertain contracts with US companies. The Trump administration hopes the move will spur LNG exports to China and help address the $300bn trade deficit the US has with the country.
Wilbur Ross, commerce secretary, and Rick Perry, energy secretary, have both in recent weeks stressed the Trump administration’s desire to help find Chinese buyers for American LNG, shipped from multibillion-dollar terminals being built along the US Gulf coast.
Daniel Yergin, a veteran energy analyst, said: “The Obama administration was generally supportive of the development and export of LNG, but did not see it as a crucial element in trade strategy. The Trump administration, with its focus on bilateral trade deficits, sees LNG as a way to address them.”
Mr Obama’s stance on natural gas production was often ambivalent, frustrating energy companies that complained about long waits for LNG facilities and export approvals.
One former Obama administration official said they had sought to tread a fine line, embracing jobs created by shale oil and gas while recognising concerns about the environmental impact of fracking, as well as the risk of LNG exports pushing up prices for domestic consumers.
LNG contracts are usually signed between private companies. But the US government can influence the market by easing the approval of export projects while also offering rhetorical support for US companies on the global stage, as the Trump administration is doing.
In Beijing this month, Mr Perry, the former Texas governor whose energy department decides whether LNG export applications are in the public interest, said: “My role is to make sure that the facilities are as operational and open for business as quickly as they can be.”
The Trump administration has mimicked one Obama White House position — its interest in using LNG as a geopolitical weapon in Europe against Russia’s energy dominance — but with fewer apparent qualms.
On the first US LNG shipment to Poland, the White House official said: “There’s no question that in eastern Europe there’s a desire to purchase US gas to diversify supply.”
Asked about a potential glut of LNG, Anatol Feygin, Cheniere’s chief commercial officer, said: “Pundits tend to overstate supply and understate demand, because it’s easy to track the supply projects coming on line, but it’s hard to know when the projects that drive demand will come on line.”